New signs of cooling inflation are sending the S&P 500 toward a record Thursday.

Stocks rose and Treasury yields retreated after data on producer prices came in softer-than-expected this morning. That joined Wednesday's reading on consumer prices to lift investors' confidence that the Federal Reserve won't raise rates imminently.

Investors now see a 68% chance that the Fed will hold rates steady at its meeting next month, according to CME Group data, compared with 45% a week ago. Bets that the Fed may not increase at all this year are edging higher, too.

Enthusiasm for the AI trade continues to build overseas, with South Korea's Kospi index gaining more than 3% for a second straight day, thanks to gains in Samsung and SK Hynix. Meanwhile, shares of Lenovo surged 20% in Hong Kong after it recorded record-high revenue thanks in part to robust AI infrastructure demand.

Otherwise, the market's quiet stretch rolls on, with trading volumes low as many investors are away from their desks for summer vacations. With few new developments in the Iran war to sway the oil market, Brent crude futures retreated to trade around $88 a barrel.